The Afterpay Touch Group Ltd (ASX: APT) share price dropped 6.7% today because of two negative factors.
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of early 2019, Afterpay had over 3.5 million registered users worldwide, making it one of Australia’s true technology success stories.
Afterpay Share Price Drops
The Afterpay share price swiftly rushed away from $30 today as two factors combined for a very negative day for the buy now, pay later company.
FlexiGroup Limited (ASX: FXL) Impresses With Its Buy Now, Pay Later Update
Afterpay now has a number of listed and unlisted rivals including FlexiGroup, Zip Co Ltd (ASX: Z1P), Splitit Ltd (ASX: SPT), Sezzle and so on.
However, the strength of FlexiGroup’s BNPL offering seems to have caught investors by surprise, which is why the FlexiGroup share price jumped 24.4% today.
FlexiGroup said that a number of new high profile retailer partners have joined the humm platform including IKEA, Myer Holdings Ltd (ASX: MYR) and the NZ subsidiary of JB Hi-Fi Limited (ASX: JBH).
FlexiGroup also said that it now has 17% of the BNPL market in Australia and 40% of the receivables. It now has over 1 million customers and 13,000 seller locations and e-commerce platforms. In New Zealand it has 160,000 customers who can shop at 1,700 seller locations.
Share Market Falls
Australia’s share market, or the All Ordinaries Index (INDEXASX: XAO)(ASX: XAO) fell 0.5% and the USA’s S&P 500 Index (.INX) went down by 1.65% on Tuesday.
I fear that some of the investors in recent weeks of Afterpay have just been chasing the momentum of Afterpay’s share price rather than judging it for the actual progress of the business, so any wobble in the market may score off a few people.
Who knows where the Afterpay share price will go next, but I’m not sure it would be a wise investment at this moment when it could drop a lot further in the short term.
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